Federal agencies concerned about the high cost of medical technologies have placed a greater emphasis on technology assessment, and setting priorities for biomedical research. New investigative techniques for evaluating medical innovations are based largely on the economic model of cost-benefit analysis. In my project, the theory, and an application of cost-benefit analysis to heart disease research will be discussed. Data on the costs of research and development, marketing and medical care related to the development of a clinically effective artificial heart will be compared with the costs of a nationwide education program to prevent heart disease. Benefits of the two research efforts will be evaluated in terms of increased life expectancy, medical costs averted, and future earnings saved. The public policy implications of these two programs will be summarized for the areas of: distribution, clinical trials, financing and regulation. Finally, strategies for evaluating and implementing assessments of future medical innovations will be drawn from the data gathered and presented in this study.